First the forest: The S&P/Case-Shiller Home Price Index, with data just released for April, continues to climb at a double-digit rate. Prices for the index, which aggregates 20 metro areas around the country, rose 10.8% year-over-year. That's a slight slowdown from last month's 11.5% year-over-year increase, but it's still quite a strong showing. On a monthly basis, prices rose 0.2% on a seasonally adjusted basis. Keep in mind that it's important to tweak this data for seasonality, since home sales typically peak in the spring and summer. The quality of those sales seems to be improving too—a recent report from the National Association of Realtors noted that foreclosures and short sales accounted for 11 percent of all home sales in May, compared with 18 percent of all home sales for the same month a year ago.
Now the trees: It's possible to think of the housing market as three separate layers of activity: highly speculative cities, cities that were never really prey to the housing bubble in the first place, and cities in-between, that have seen a boom and bust, but at a relatively moderate pace. The highly speculative cities (think Las Vegas, Phoenix, Miami) continue to show blazing recovery, though at a more moderate pace than formerly. David M. Blitzer, the chairman of the committee that issues the Case-Shiller Indexes, stated in a release that "last year some Sunbelt cities were seeing year-over-year numbers close to 30%." Arguably, the current data is still quite good—year-over-year, Vegas is up 18.8%, Miami up 14.7%, and Phoenix up 9.8%.
In another tier, a city that never really seemed to have had its bubble burst in the first place, Dallas, set a new housing price record as prices climbed 9.3% year-over-year. To quote Trey Garrison of Housing Wire, "as locales go, it doesn't get better than Dallas." Homes there are also selling quickly, Garrison noted, as the average number of days on market dropped 12% from the prior year to a current 54 days (yes, less than two months) on market. Similarly, Denver home prices, up 8.9% year-over-year, hit an all-time high. Metrolist, the company that runs the Multiple Listing Service in the Denver area, reported earlier this month that days on market had dropped to 29, from 44 a year ago.
But it's the performance of the in-between cities that seems most interesting this month. Boston showed an increase in the pace of its rising prices, from 8.3% year-over-year to 9.0%. Atlanta, Chicago, and Seattle all clocked monthly gains of at least 2.0% (2.0%, 2.0%, and 2.3% respectively) with strong yearly numbers as well (13.7%, 10.7%, and 11.2%, respectively).
Given the way the three tiers of the index are performing, it looks like the next few Case-Shiller data points (May and summer) may come in looking worse at first glance, as activity in the most speculative markets cools off. But an examination of those in-between cities -- I'm hesitant to call them middle tier -- shows that the housing recovery is broad-based, and it seems that it will continue to be for some time.